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Dear Chairman [Paul] Atkins,
Distinguished guests,
Friends all,
Welcome to this first OECD Roundtable on Global Financial Markets.
These Roundtables, which we will host twice a year during the OECD’s Financial Markets Week, provide a unique platform for dialogue among policymakers, regulators and financial market participants.
Your discussions this afternoon will focus on ways to unlock stronger competitiveness and growth through sound, vibrant and well-functioning capital markets.
We are currently facing an uncertain economic outlook,
High policy uncertainty,
Geopolitical and trade tensions,
Increased trade barriers resulting in increased costs;
Tighter financial conditions,
Weakening business, consumer AND investor confidence, are all weighing on global investment and growth prospects.
As we navigate these challenges and work together to restore policy certainty, we must also intensify efforts to revive the long-term growth prospects of our economies — which have been too weak over the past two decades.
Potential GDP per capita growth for the OECD this year – that is removing business cycle fluctuations – is estimated at 1.3%, down from around 2% in the 1990s.1
A key driver behind this trend has been the sharp decline in both public and private investment since the 2008 Financial Crisis— despite the historically low borrowing costs and strong corporate profits during much of that period.
We estimate that the contribution of investment to potential GDP per capita growth in the OECD has more than halved since the global financial crisis.
Across advanced economies, total real investment volumes last year were 22% below the pre-global financial crisis trend level,
And they were 7% below the pre-COVID trend level.
Among businesses, investments in tangible assets such as infrastructure and machinery, have even declined as a proportion of revenue since 2000.
To improve our growth prospects, and meet rising fiscal pressures from population ageing, financing requirements related to defence and infrastructure, enabling digital technology adoption and to achieve our climate objectives, we need to find better ways to address longstanding structural weakness in investment,
Implementing a range of ambitious reforms,
To unlock greater competition and business dynamism that incentivises productive investment,
To encourage businesses to reinvest earnings where appropriate rather than focus on shareholder buyouts,
And to deepen capital markets to provide more funding options for businesses and competition among lenders – particularly in Europe by further developing the savings and investment union.
New private investment will be especially critical as governments grapple with mounting fiscal pressures.
Our 2025 Global Debt Report projects central government marketable debt to reach 85% of GDP across the OECD — more than 10 percentage points higher than in 2019, and twice the level in 2007.
Debt servicing costs have already increased as a share of GDP in about two-thirds of OECD countries in 2024, reaching 3.3% on average [up from 3.0% in 2023], and they are set to increase further this year and next.
With central banks progressively withdrawing from debt markets, private investors will be needed to absorb a growing supply of government bonds.
So vibrant, well-functioning capital markets have several key roles to play in meeting today’s challenges, from supporting renewed business investment, to providing sovereign debt market liquidity and sustainability.
Your discussions today will cover three key areas where there is further untapped potential in capital markets – and the policy frameworks needed to draw on it.
First, further increasing the participation of certain key institutional investors – such as asset-backed pension funds and insurance companies – in equity markets, while protecting their beneficiaries and ensuring appropriate risk management.
Asset-backed pensions more than tripled in value over the past two decades, from 15 trillion in 2001 to 56 trillion in 2023.2
And insurance assets doubled from 12.9 trillion USD in 2009 to 25.5 trillion in 2023 in the 30 OECD countries with available data.3
As they have grown, they have increased their equity investments, providing valuable liquidity in public markets and much-needed private capital for long-term projects including infrastructure.
In 2023, equities represented 27.1% of total investment of pension funds across the OECD, a 8.4 percentage point increase from 2008.4
This trend is positive news for investors: our analysis across 38 OECD and non-OECD jurisdictions with defined contribution pension schemes shows that pension funds that invest in equity often generate better retirement outcomes.5
And there is room to grow further – unlocking more of the investment that our economies need while improving performance.
However, greater reliance on equity investments can also increase the risk profile and volatility of investments.
Regulations that safeguard the interests of beneficiaries are essential, in particular to ensure sound management strategies that prevent equity market downturns close to an individual’s retirement age from severely impacting their retirement income.
To ensure the appropriate balance between risk and return, in the case of pensions, for example, OECD work recommends that regulators allow providers to offer life-cycle investment strategies, which gradually reduce equity exposure as individuals near retirement, encouraging innovation in tailoring fund management to individual needs.
Second, by enhancing the quality of sustainable finance products without imposing undue reporting burdens on businesses.
Sustainable finance products continue to grow.
For instance, at the end of 2023, corporate issuance of sustainable bonds reached 2.3 trillion US dollars, while government issuance stood at 2.0 trillion.6
This represents a six-fold increase over the period from 2019 to 2023.7
As the market for these products has expanded, there has been a proliferation of taxonomies and reporting standards, making it more difficult for investors to assess the sustainability performance of issuers,
While imposing significant administrative burdens on issuers and ultimately discouraging the uptake of sustainable finance products.
Your discussions today will explore how we can ensure market intermediaries have access to the necessary data to make informed investment decisions on sustainable products and mitigate greenwashing, without substantially increasing the reporting burden on businesses and ensuring competition on a level playing field.
Third, by encouraging the safe, secure and trustworthy use of AI in finance, while safeguarding consumers and markets.
The OECD’s latest estimates show that expected productivity gains from AI adoption in the finance sector are among the highest of all sectors – amounting to 12% of productivity growth in the sector across G7 economies over the next 10 years.
AI technologies are already unlocking important efficiency gains in asset management and securities, including optimising portfolio management, automating trading, and providing more accurate risk analysis.
AI can also contribute to greater financial inclusion by broadening access to financial services for underserved or traditionally excluded populations.
At the same time, the use of generative AI raises the risks of financial fraud and scams, as well as cyber-attacks, among other concerns for consumers and businesses.
The use of AI in financial markets can also increase market volatility if a significant number of participants rely on similar AI models, leading to a convergence of trading strategies and feedback loops between models.8
Your discussions will explore supervisory approaches that balance the promotion of responsible AI in finance with policy objectives of market stability, integrity and financial consumer protection.
In closing,
Capital markets can make a powerful contribution to stronger growth, productivity and opportunity in our economies, whether by investing in technology diffusion and innovation, infrastructure or business creation and expansion.
To make this happen, we need a sound policy environment that broadens participation and enables innovation in capital markets, all while ensuring consumers’ interests and the stability of the financial system are protected.
My very best wishes for a positive, constructive and productive discussion.
I now invite Mr. [Paul] Atkins to take the podium to deliver his keynote remarks.
1 OECD Economic Outlook, Volume 2025 Issue 1.
2 OECD (2024), Pension Markets in Focus 2024, OECD Publishing, Paris, https://doi.org/10.1787/b11473d3-en.
3 Source: OECD Global Insurance Statistics. The seven OECD countries excluded because of data unavailability for one of the two years are: Canada, Costa Rica, Iceland, Ireland, Lithuania, New Zealand, Türkiye.
4 OECD (2024), Pension Markets in Focus 2024, OECD Publishing, Paris, https://doi.org/10.1787/b11473d3-en.
5 Albania, Armenia, Australia, Bulgaria, Chile, Colombia, Costa Rica, Croatia, Czechia, Denmark, Estonia, Finland, Greece, Hong Kong, Hungary, Iceland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malawi, Maldives, Mexico, Nigeria, North Macedonia, Pakistan, Peru, Poland, Portugal, Romania, Serbia, Slovak Republic, Slovenia, Spain, Türkiye, US, Zambia. Source: OECD (2024), OECD Pensions Outlook 2024: Improving Asset-backed Pensions for Better Retirement Outcomes and More Resilient Pension Systems, OECD Publishing, Paris, https://doi.org/10.1787/51510909-en.
6 OECD (2024), OECD Pensions Outlook 2024: Improving Asset-backed Pensions for Better Retirement Outcomes and More Resilient Pension Systems, OECD Publishing, Paris, https://doi.org/10.1787/51510909-en.
7 OECD (2024), OECD Pensions Outlook 2024: Improving Asset-backed Pensions for Better Retirement Outcomes and More Resilient Pension Systems, OECD Publishing, Paris, https://doi.org/10.1787/51510909-en.
8 A one-way market, or one-sided market, is a market for a security in which market makers only quote either the bid or the ask price. One-way markets arise when the market is moving strongly in a certain direction. By contrast, a two-sided market is one where both the bid and ask are quoted.
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